"How Does Sustainability Management Work?" - Interview with Rüdiger Grube

The establishment and management of sustainability principles: Rüdiger Grube, member of the Daimler Board of Management with responsibility for Corporate Development, talks about the newly established Sustainability Board.

Mr. Grube, Daimler's recent establishment of a Sustainability Board gives the Group a new body for sustainability management at the top executive level. You're chairman of this new organization. Has it really taken this long for Daimler to recognize the importance of this issue?

No, not at all. Conducting our business in line with the principles of sustainability has always been a key element of our corporate strategy. For example, we established binding corporate values many years ago and we also have sustainability principles in place. Another example of our long-standing commitment to sustainability is offered by our Environmental Guidelines, which were approved by the Board of Management back in 1990. For quite some time now, the Group has also been operating corporate functions that have been very successful in monitoring and controlling the three dimensions of sustainability - economy, ecology, and social responsibility. Environmental protection, for example, is not only addressed at the top management level by our Chief Environmental Officer; it's also an integral part of the activities at the Research & Development department, which since 1990 has played a crucial part in helping to ensure that environmental protection measures are successfully implemented throughout the entire product lifecycle - from product development and production to sales.

It sounds as though you already have a well-functioning management system in place - so why set up a new corporate body now?

Sustainability requires addressing the big picture, which means that the concept behind it extends well beyond our environmental protection activities. As a major automobile manufacturer, we need to focus not only on ecological aspects but also on key social and economic challenges. Sustainability therefore also involves community projects, social commitment, traffic safety issues, supplier relations, and being a good corporate citizen toward our neighbors at the locations where we operate. Ultimately, successful sustainability management means achieving a successful balance between the three dimensions I mentioned before. And although these dimensions may sometimes have conflicting interests, we can't afford to address them separately.

Are you saying that the new top-level organization will address the balance between the three dimensions?

Yes, but it will also do more, because in the future we will be coordinating our diverse sustainability activities even more closely. We actually took the first step toward consolidating our strengths and intensifying our top management approach to this issue back in 2005, when we established the Sustainability Task Force. This interdisciplinary team initially focused on improving our sustainability reporting system. Since then, we've been producing an annual integrated sustainability report that conforms to internationally recognized reporting guidelines. Because the quality of our reporting is dependent on our activities as a company, we've been focusing more and more on our performance in key areas related to sustainability, and the new Sustainability Board will now systematically integrate the relevant operational disciplines into our sustainability management approach.

Can you give us some examples of what you mean here?

Over the last three years we have created new management functions such as our Global Diversity Management system, which is supervised by the head of Human Resources and Labor Relations, Günter Fleig. We also established a compliance organization back in 2006, and we have continually expanded the scope of its activities since that time. This organization also reports directly to the chairman of the Board of Management. The Sustainability Board will more closely align and coordinate the activities of these various functions and enable us to respond more effectively to interdisciplinary situations where action needs to be taken. It was therefore very important to ensure that the new Sustainability Board would report directly to our CEO, Dieter Zetsche.

What specific type of work will the Sustainability Board carry out?

The first thing we did was to identify the specific areas where we need to improve coordination and take action in order to improve sustainability management. We then formulated ambitious goals for each topic area and developed measures to achieve them. The Sustainability Board will now coordinate the implementation of these measures and evaluate their effectiveness, whereby the implementation will be carried out by the corporate functions and business units responsible for each particular issue. We already have the experts and the expertise we need for this in place at those organizations, so the real challenge is to utilize existing structures and areas of responsibility more effectively.

How will you assess the performance of the sustainability management system?

One important measure of success is the sustainability ratings issued by accredited agencies. Scoring well in such rankings demonstrates that external experts believe we're on the right track and have taken the proper measures. That's also why we're so pleased to have been listed on the Dow Jones Sustainability Index (DJSI) for the third consecutive year in 2007. Still, there's always room for improvement.

What are the major challenges Daimler faces with regard to sustainability management?

Our goal must be to receive worldwide approval for our business activities not just from rating agencies but, more importantly, from our various stakeholders, by which I mean customers, employees, shareholders, politicians, government agencies, NGOs, the media, and of course our direct neighbors. We need to improve here, and one way to do this will be to intensify and restructure our system of engaging in dialogue with our stakeholders. It's very important to me to not only tell our stakeholders what we're already doing right but also to discuss with them what we can do better in the future.